Commuting - When gas goes to $5 a gallon . . .

When gasoline goes to $5 a gallon, the Walmart parking lot will be full of bikes.

No it won't. It will be just as full of cars as it is now. There will, however, be a lot of children suddenly sold into slavery.

lol.
Well I gotta agree. If gas goes to $5gal. than people will just pay $5 a gal. They won't change. They won't change if it goes to $10 a gal. They will just drive less but they won't use alternative transportation.

Hmmm... Hold on a minute. This morning I bought a tank full of petrol (gasp!) at 75.9 pence per litre. If 4 litres is approximately 1 US gallon, that's £3.036 per gallon. Given an approximate exchange of £1 to $1.45, that gives me... $4.40 per gallon.

Kind of close, huh? And yes, I still use my car, even though I have no children to sell into slavery yet. :rolleyes:

Ellie

I don't need to sell the children yet, Got a diesel family car and a 1.1 Metro as a 2nd Car.

We haven't reduced our mileage because of the price of fuel. But then our combined mileage is less than 10,000 miles pa (and we take the car on holiday)

I doubt gas will go to $5 a gallon any time soon, there is more than enough oil around to keep its price reasonable stable for a long time. And these places, such as UK and Germany, with outrageous gas prices is due to taxation, not a shortage of gasoline or excess demand in any fundamental sense. Sure an Iraqi war might cause disruptions, but i doubt they would be for long term (although there certainly ARE scenarios where this would occur).

I would, as a matter of social policy, like to see fewer cars on the road and less mileage for the cars that remain. But the major problem is in the cities, not the rural areas, where cars are both convenient and essential.

roughstuff

Originally posted by Ellie
Hmmm... Hold on a minute. This morning I bought a tank full of petrol (gasp!) at 75.9 pence per litre. If 4 litres is approximately 1 US gallon, that's £3.036 per gallon. Given an approximate exchange of £1 to $1.45, that gives me... $4.40 per gallon.

Kind of close, huh? And yes, I still use my car, even though I have no children to sell into slavery yet. :rolleyes:

Ellie

Ellie makes a very good point.

A lot of us in the USA think that the answer to the automobile over-use problem is higher gas prices. Fast forward into the future by going to Europe or Japan where gasoline is between $4.00 to $5.00 per gallon already.

The streets are still clogged with traffic. Bicycle commuting is not tremendously more prevelant than in the USA This is despite the fact that they have better mass transit systems than the USA and they have deep rooted bicycle cultures where bicycle commuting is not considered terribly unusual. People still hop in their cars to drive three blocks for a pack of smokes.

The answer isn't more expensive gasoline. Too bad it isn't that simple.

All it would take is a small mistake in the middle-east by the intrepid George W. Bush and it could easily happen. I read somewhere that a 2% shortage would probably mean somthing like a 50-100% increase in price. The way I see it, it is entirely possible, good thing I don't drive!

When gas goes to $5 a gallon . . . tire tubes will still be $5. Maybe my girlfriend will get off her butt & start pedaling around.

Quick! Everybody stock up on tubes before we have a 2% shortage of gas, then we'll control the world supply of bicycle tubes... we can be the bicycle mafia

think of the possiblilaties!

Originally posted by Spire
All it would take is a small mistake in the middle-east by the intrepid George W. Bush and it could easily happen. I read somewhere that a 2% shortage would probably mean somthing like a 50-100% increase in price. The way I see it, it is entirely possible, good thing I don't drive!

The Middle East makes up about 25% of the total global supply of oil. The most probable way that a bump in Middle East oil supply could cause a 50% to 100% price increase is if it caused world panic, and gas hording - all very probable.

Don't think that bicycling will isolate you from the problem. If gas prices double, it will crush the USA economy. The USA is wholely dependent on cheap fuel. You can have a bicycle with no job to ride it to.

Originally posted by mike
You can have a bicycle with no job to ride it to.

I know this is bad, but that just is funny. :)

[quote] If gas prices double, it will crush the USA economy. The USA is wholely dependent on cheap fuel [unquote]

....and now you understand why the rest of the world is currently looking rather cynically at Mr Bush, with his saber rattling with Iraq.

As an oilman he is well aware of just how dependent the USA is on cheap fuel, and if that means he has to 'liberate' Iraq or any other country with lots of oil then he will do so.

His latest attempt to try and link the ligitimate (albeit very unplesent) government of Iraq with their enemies Al-Quada and/or the Taliban would be laughable if it were not potentially so serious.

If his ventures in Iraq come to nothing, I'd be very worried if I was in a position of power in Venezuela, as that would be the next logical country that will need 'liberating' to ensure the cheap fuel for the USA continues.

Otherwise it will be Nigeria and/or Lybia as logical targets.

I think I remember from ecomonic classes that gasoline is classed as an in-elastic product. By this I mean that no-matter what the price the demand will still be there.
If US gas went up to $5 a gallon, then it would have a knock on effect to the economy.
Even at, say, $10 a gallon shops would still need to be stocked with goods that are trucked in. This increased haulage cost would be reflected in increased prices for goods.
People would then demand wage increases in order to afford these new prices and you get a nice inflationary merry-go-round.

Originally posted by Roughstuff
I would, as a matter of social policy, like to see fewer cars on the road and less mileage for the cars that remain. But the major problem is in the cities, not the rural areas, where cars are both convenient and essential.


This is, of course, an extremely valid point. Here in Australia we've got the farcical situation where fuel prices in the rural areas are 20-30 cents/litre (around $1/gallon) more expensive than in the cities. Some of these rural areas are as much as 500km from the nearest town. Is it any wonder this is the most urbanised country in the world?

Of course, if urban planners stopped simply setting aside massive tracts of land for car-parks, perhaps the problem in the cities would solve itself. Maybe the money the plough into car-parks could be put into public transport instead.

"The Middle East makes up about 25% of the total global supply of oil. The most probable way that a bump in Middle East oil supply could cause a 50% to 100% price increase is if causes world panic, and gas hording - all very probable."

i'm no expert but i believe the price of oil has more to do with perception on the part of consumers than the reality of supply/demand. if Big Oil and Big Oil's ***** (that'd be GWShrub .... errrr, Bush) feel that consumers BELIEVE there could be an oil shortage as a result of an invasion of iraq, they will most assuredly respond by hiking prices. it's called "gouging," and it is the way business is done in the energy marketplace. ask californians about electricity "shortages."

it is true that people in europe and asia pay lots more for gas, but that they continue to drive. i believe they drive less, however, and they tend to favor more fuel-efficient vehicles, including motorcycles and mo-peds. in my opinion it is unrealistic to expect americans to stop driving cars, but a big hike in prices might finally put a dent in sales of gas-guzzling SUVs, vans, and trucks. it would be great to see these behemoths go the way of the dinosaur.

:angel: As a resident/victim of the most congested state in the union and also with the highest car insurance rates, let me say that I would love to see $5 a gallon so all those posers in the SUVs have to pay through the nose. You know the type, they only go offroad when the fail to negotiate the spaces at the Bridgewater Mall!!!!


RIDE MORE

Originally posted by Bandit
... it's called "gouging," and it is the way business is done in the energy marketplace. ask californians about electricity "shortages."
OK, you asked, so about the shortage in CA.

No new power plants for years and years and years
Increasing demand brought about by then-booming economy and hot spells in summertime
"Deregulation" in 1996 that (a) prohibited utilities from signing long-term contracts and (b) barred price increases until 2002.

Funny, isn't how the "crisis" has been averted?

Power plants have been/are being built
Demand has dropped precipitously due to soft economy and two back-to-back cool summers
Saner states, like Nevada, sell CA its excess power

So, you blame the "energy marketplace" (implicitly, greed) for natural swings in supply and demand, exacerbated by so-called deregulation. What is "gouging" if CA is forced to buy nearly all its power off the spot market? Isn't the spot market always going to be higher than long-term markets in times of shortage? Any two-year-old can figure that out. CA politicians apparently can't.

any two-year-old might also surmise than any business transaction with enron is liable to be less than aboveboard.

oh, and by the way ... what political misbehavior do you attribute the fact that californians pay more for gasoline than any other state?

Originally posted by Bandit
any two-year-old might also surmise than any business transaction with enron is liable to be less than aboveboard.

oh, and by the way ... what political misbehavior do you attribute the fact that californians pay more for gasoline than any other state?
Davis tried but failed to deflect the blame of the electricity crisis to Enron. Prove the association if you feel so adamant about it.

On the higher gas prices, are you aware of the special formulations that CA alone stipulates? This, by virtue of the CA Air Resource Board, or CARB?

So, CARB regs limit the availablity of gas that is freely available elsewhere. You may or may not agree to the priciple of the CARB regs, but a natural by-product of those regs is a lessening of supply (as well as a more expensive refinery process).

You are aware of this, right?

Originally posted by Andy Dreisch
On the higher gas prices, are you aware of the special formulations that CA alone stipulates? This, by virtue of the CA Air Resource Board, or CARB?

So, CARB regs limit the availablity of gas that is freely available elsewhere. You may or may not agree to the priciple of the CARB regs, but a natural by-product of those regs is a lessening of supply (as well as a more expensive refinery process).

You are aware of this, right?
In Atlanta, we are going to adopt regulations that require
gasoline meet higher clean air standards. This will make the gas more expensive in our area.

you mean am i aware of special formulations? yup. i'm aware. but i seriously doubt these formulations account for the price difference. more likely it's an example of oil companies getting what they can from a docile market. but i'm kind of cynical when it comes to Big Oil.

thanks for the debate, andy. as i stated in the beginning i am no expert on this topic, and i value your opinion.

by the way, many people feel it's poor form to adopt a hostile tone toward people who post opinions that don't jibe with your own.

are you aware of this?

Originally posted by LittleBigMan

In Atlanta, we are going to adopt regulations that requires
gasoline meet higher clean air standards. This will make the gas more expensive in our area.
Yep, that's the price paid for the benefit of cleaner air. I'm not arguing the merits of that choice or that policy, as I was careful not to argue the merits of CARB in my post. That's a whole different matter. But a natural by-product of special formulations is a lessening of supply and increased refinery costs.

(I just hope you're not going to use MTBE as an oxygenate; MTBE has totally screwed CA water supplies.)

Originally posted by Bandit
... by the way, many people feel it's poor form to adopt a hostile tone toward people who post opinions that don't jibe with your own.

are you aware of this?
Hey, it's a discussion forum. I was challenging your statements. I believe that when "facts" are stated with no qualification ("In my opinion") and no attribution, then they're fair game.

But I'm no expert either. Never claim to be.

Sorry if I was abrupt.

Originally posted by Bandit
you mean am i aware of special formulations? yup. i'm aware. but i seriously doubt these formulations account for the price difference. more likely it's an example of oil companies getting what they can from a docile market. but i'm kind of cynical when it comes to Big Oil.
Here's some attribution from http://www.haas.berkeley.edu/groups/newspubs/haasnews/archives/hn041000.html#gas. This is from Berkeley of all places!!

A quote: "That [CA's special formulations] has put the state in a very precarious supply/demand balance which, as we learned last year, makes us vulnerable to price spikes whenever a refinery has problems".

interesting (especially considering the source). but that doesn't explain the steady-state price of gas even when there is not a shortage. here in the golden state we typically pay a 30-cent-per-gallon premium for our fuel, which amounts to, what, 20 percent? i find it difficult to believe that formulated gas costs that much more. but then again, no one has ever mistaken me for a chemical engineer.

Originally posted by Bandit
interesting (especially considering the source). but that doesn't explain the steady-state price of gas even when there is not a shortage. here in the golden state we typically pay a 30-cent-per-gallon premium for our fuel, which amounts to, what, 20 percent? i find it difficult to believe that formulated gas costs that much more. but then again, no one has ever mistaken me for a chemical engineer.
Well, I guess another way to look at it is that the price of gas in CA has failed to reach equilibrium with other areas local to CA, such as NV, AZ, etc.

Why is that? And why is northern CA more expensive than southern CA?

Why can't the prices stabilize in CA like they do everywhere else? There must be a reason.

If equivalent gasoline can be supplied from elsewhere, wouldn't it make sense that the prices would have stabilized long ago? Other refineries would be more than happy to sell into a higher-priced market, for they are profit-seeking enterprises after all. This would have the effect of reducing prices over time.

Why don't they do that? Why are other refineries not rushing in to make up the gap? Is it because they don't want profit?

Of course not. It's because they can't !!! Because of the special formulations, they can't sell into CA. This limits the amount of refineries capable of supplying the specially refined gasoline, which has the effect of restricting price competition.

BINGO !!!

Originally posted by Andy Dreisch
Why is that? And why is northern CA more expensive than southern CA?

I am quite curious now. If there are no forumulation differences between NoCal and SoCal, then why the price disparity? My gut says it has something to do with regulations in NoCal, or more specifically the Bay Area, that affect gas stations. Does this seem right, Andy? Maybe distribution (pipelines, tankers) difficulty in reaching those markets?

Also, with regards to CA getting gouged on the energy spot-market, the first case is in court right now that is attempting to prove criminal wrong-doing, so it looks like it's not entirely the fault of CA's policies. This link contains summaries and commentary, as well as links to the source articles: http://www.viridiandesign.org/notes/301-350/00346_californias_vengeance.html

53-11

Originally posted by morsen
I am quite curious now. If there are no forumulation differences between NoCal and SoCal, then why the price disparity?

Basically because SoCal and NoCal are two different states in terms of the delivery (supply) of gasoline.

"Oil industry analysts say that supplies of California's reformulated gasoline have been reduced recently due to maintenance or equipment fires and explosions at three key northern California refineries." (from http://www.aaa-calif.com/members/corpinfo/fuelcost.asp) This illustrates a NoCal susceptibility to constrained supplies that cannot be easily met by SoCal refineries (pipelines between NoCal and SoCal are non-existent).

Refinery locations: http://www.energy.ca.gov/maps/refinery_locations.html There are more SoCal refineries (supply and competition).

From San Francisco Chronicle article from 1998:
``There are many different factors why you pay more for gas,'' said Alan Kovski of the Oil Daily, a petroleum industry newsletter in Washington, D.C. ``State taxes (in California) are higher on average than elsewhere in the U.S., and you have reformulated gasoline, which adds about 8 cents a gallon. And there are other factors, less tangible.''

Among them, Kovski said, is the fact that while California is big, it is nowhere near the size of ``the integrated market that goes from the eastern edge of the Rockies to New York City. That larger area has more supply and more competition, and these are the things that drive prices down.''

For many of the same competitive reasons, motorists in Southern California pay less -- gas there averages about $1.12 a gallon -- than drivers in Northern California. There are more gas stations per square mile down south, real estate is cheaper and available sites for gas stations are more plentiful. " Source: http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/1998/02/17/MN102815.DTL

Originally posted by trmcgeehan
When gasoline goes to $5 a gallon, the Walmart parking lot will be full of bikes.
Although I agree with others that say people will still drive, history has shown that the popularity of transportational cycling seems to increase during such extreme circumstances.

I think the cost of driving is already beyond ridiculous. Cycling makes more sense to me than any other form of transportation. I'll keep doing it even if gas prices drop to 50% of what they are now.

In fact, if gas was free, driving would still be too expensive for my tastes. Strange, since the original vision (and success) of Henry Ford rested in making the motorcar affordable for more people. Now that it's found it's powerful niche in it's role as a necessity, that's no longer the case. People take it for granted they must own a car and shell out a huge sum every year to drive one.

Like I said, the more I can be free of driving a car, the better.

I love the feel of a nice car as much as anyone. But the headache and expense makes me rebel against the tyrrany.

Regards,

Pete

I am with Pete Clark on this 100%. Even if they give a gallon of gas away with each purchase of a box of cereal, I am going to keep on bicycling.

Again, I think gas could be $10.00 per gallon and we will still see people driving for stupid reasons. The type of cars people drive would change. We know that from history.

I must say, though, that whenever there is a rapid gas price increase and even right after 9-11, I did see a little more bicycle commuting going on. The problem is that it just doesn't stick. After about a month, most people go right back to driving cars.

Some interesting remarks above.

I'll add a couple (remarks, you can decide whether they're interesting).

Price spikes from political upheavals in the Middle East are not going to be long lasting enough to make a significant difference to people's driving habits. OPEC's cartel is much weaker than in the 70's, because of reduced cooperation and because of greater oil production from non-member states. So, even if gas does go to $5 in the near term it won't be for very long.

If gas prices _did_ get that high indefinitely, we would see some reduction in driving, but only marginally. Even very poor people own cars when they can, and we can suppose that the preferences of better off people now are not significantly different. So as the cost of driving increased, we'd find other activities curtailed before driving was curtailed. The demand for driving is fairly inelastic.

Not that this bears so much on what was said so far, but the majority of the price of gasoline is determined by the cost of refinement and transportation. Oil now is somewhere around $30 a barrel, and a barrel of oil is 42 U.S. Gallons. Gas here is about $1.50, I guess, but even this is an atypically high ratio of oil cost to gasoline per gallon. (Gas companies tend to even out their prices, in part because of market concerns, and in part because the gubmint gets p.o.'d when the price of gas goes up and encourages these companies to restrain fluctuation. If oil stays this high, as it might if there is war in coming months in Iraq, the price of gas will increase significantly.)

That's all.

may be george & saddam are secret partners in a bike factory , i wonder wat kind of bikes they would make & wat names they would give their products. their long distant tourer could be called the "SCUD":D

Originally posted by Merriwether

Price spikes from political upheavals in the Middle East are not going to be long lasting enough to make a significant difference to people's driving habits. OPEC's cartel is much weaker than in the 70's, because of reduced cooperation and because of greater oil production from non-member states. So, even if gas does go to $5 in the near term it won't be for very long.


Merriwether reminds of the historical lesson the USA had in the 1970's. I remember the oil shocks that rippled through the world. Not only did gasoline prices double almost overnight, but eventually gasoline became inconvenient to purchase. People waited in long lines at the pumps. Some cities initiated a scheme where cars with odd numbered plates got gas on odd numbered days and even numbered plates on even days. It was a mess.

Still, my dad drove to work in a big gas guzzling pick-up when he could have easily bicycled the four or five miles. I don't think the thought of bicycling even came to his mind as an option. The solution, it seemed, was to bittch and worry about it. I did not know any adults who changed their driving habbits. Heck, we continued to drive our big gas hog International Harvester through the '70's until the wheels literally fell off.

That said, it should be pointed out that the 1970's DID see the biggest bike boom in USA history in terms of numbers of riders and bicycles sold. Maybe it was the oil shocks, maybe it was the music. Who knows why, but it happened.

dont put the price up in a shortage , ration the stuff:crash:

The bike boom had already peaked and was starting to wind down when the oil crises happened. The two events DID overlap and the bike boom may have gotten an extra year or two of life because of the oil crises but the two events were not related- one did not cause the other.

Originally posted by cycletourist
The bike boom had already peaked and was starting to wind down when the oil crises happened. The two events DID overlap and the bike boom may have gotten an extra year or two of life because of the oil crises but the two events were not related- one did not cause the other.

I think you are right about the bike boom starting before the oil shocks. It did last substantially longer than the shocks, though. I think the bike boom lasted until the early '80's. If I remember correctly, the bike boom ended on June 16, 1982.

As Walter Cronkite used to say, "...and you were there." I was there in the '70's gas shortages. People actually did wait in line to buy gas. The Japanese are still thanking their ancestors for that stroke of "luck."

Hey, like I said: gas prices aren't why I ride. To be truthful, car prices aren't, either. The cost of a new $2,000 transmission from AAMCO isn't, too. These are just fringe benefits.

I ride because I can.

:thumbup: